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But beyond the lack of evidence for the metal's value thriving in either scenario, gold investors now face a situation that even they can't put a positive spin on. Major gold vendors like Goldline are coming under rapidly rising scrutiny for steering customers into coins with markups of 35%.

Salespeople imply that investors could exploit a loophole for antique coins to avoid a government confiscation of gold that supposedly took place during the Great Depression. But investors who try to sell the coins see a sharp drop as the market value tends to be less the huge profits pocketed by the vendor.

Fear-Mongering and Conflicts of Interest

Fear-mongering by those who, like Fox News host Glenn Beck, have lucrative deals with gold vendors has been causing angst about conflicts of interest for months. But reports of customers getting put into investments that lose a third of their value upon purchase are causing a new sense of alarm.

A recent episode of ABC's Nightline, for example, profiles a 63-year-old investor who got only $2,900 for coins he paid $5,000 for just months prior to selling them. Authorities in Los Angeles say they have received over a hundred customer complaints and have launched an investigation of Goldline and Superior Gold Group.

Adam Radinsky from the Santa Monica, Calif., City Attorney's office told ABC that there have mainly been two types of complaints: customers who said they were lied to and misled into their purchases of gold coins, and those who said they received something different from what they had ordered.

Prices Could Turn Down Sharply

While Goldline executives like to advertise that they have $500 million in sales, it remains unclear what portion of these come from items like coins with steep markups. But if consumer sentiment sours, the momentum in gold prices could turn much more violently than even other volatile investments like stocks and real estate.

Unlike those assets, gold generates no income, and judging its worth is a guessing game. This helps boost prices when they're on an upward swing. But when the tide turns, there's no measure like price-to-earnings ratios with stocks, or rental-versus-purchase calculations with houses, to help provide support against a price crash.

Despite the all-encompassing claims made by its advocates, gold may turn out to be a good investment for only one scenario -- when gold prices just happen to be rising.

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ddonaldtrip

If you are going to invest money into ANYTHING, I mean ANYTHING, you need to do research. If somone told you to jump off a bridge… would you? Glenn Beck isn't God and if tells you to do something, like invest in a CERTAIN company; he is probably getting something out of the deal. He is correct that you should hedge your investments against the fall in the dollar, but not through Goldline. I am currently investing with regalgoldcoins.com and they have been amazing. My rep went through all of my questions and then some, before I made any purchase. No pressure, competitive prices, and quick delivery. I am more than pleased!!!

I purchase gold from Goldline and I'm very pleased! First off, it is a choice to purchase gold. I'm not rich & wealthy, but I do have common sense. I do not have an economic degree from a prestigious ivy league school, however I saw this market crash coming a mile away!! Gold is like insurance to hedge against inflation! IT IS A CHOICE! Please do not baby us consumers and think that we cannot make rational decisions!! People always try and blame the BIG BAD COMPANIES; when people should do their own research to see if gold is the right decision for them.

Forgetting about whether the two companies you have mentioned are guilty of anything, this was the most incredibly stupid piece of journalism I have ever read in my 55 years of being on this earth. You should give up your day job and find something you might be good at. If you stay in journalism get an education on how to be good at it, no, great at it! Like any INVESTMENT, people should get an education in it before jumping in with both feet. Has anyone heard of the internet? There is plenty of information on it to educate consumers.

Vishesh needs to go pee up a rope, If he wanted to write an article against Glenn Beck why didn't he just do so.? Lots of hosts are touting gold, including liberals, (theres just not many liberal talk show hosts). Vishesh just seems to be a political writer wanna be. He might try getting a real job.

How many of the posters on this board went out and bought gold from gold lineafter hearing Glen Beck on the radio or watching his news show on tv??Anyone of you at all?? None of you?? I did not think so.Now if you wanted to own gold you could of bought proof buffalos from the U.S. mint and you would only be in the hole about $300 to $400 per coin. There is a large premium on U.S. mint coins but they come in nefty presentation box!!If people bought gold from goldline as a long term investment and went out to sell it 6 or 8 months later I am not sure why they expected to be positiveon there investment. There are a lot of naunaces in the buying and sellingof gold so if you lose money on gold you where not prepaired to be in the market and the loses are your own fault.

You are either ill informed or trying to deceive your readers when you write: "Salespeople imply that investors could exploit a loophole for antique coins to avoid a government confiscation of gold that supposedly took place during the Great Depression"

Supposedly???? In 1933 FDR signed an executive order banning the owning of gold coins or gold bullion by private citizens. Prior to that order anyone could turn in American paper dollars for gold at a rate of $32 per ounnce. After that order, only foreign Central Banks were allowed to excheange their paper dollars for gold bulion at the Treasury. Subsequent to that Decree by FDR, ALL gold coins then collected by the government were melted down into gold bricks and then stored by the US government as bullion at Fort Knox. And that is precisely what people are worried the Obama Administration, which so admires FDR, will do sooner or later. By the way, note that in 1932 gold sold for $32 per ounce and today it sells for around $1200 an ounce. So tell me Mr. Kumar, which would one have been wiser to hold on to for one's grandchildren in 1932, paper currency or gold coins and/or gold bullion? And yes, this is an oblique attack on Beck's sponsors.

This is such nonsense. There are always people looking to claim they were victims, in particular if it looks like they can get something for nothing out of their claim. You do not buy Gold from Goldline, you are buying Gold coins. They will not sell to you until you have read their package of information specifically telling you about the difference. So one would have to question what is the motive of the government and the media in attacking Goldline? It is to silence Beck? Is it to keep "we the people" from having anything that might be used in a crisis? I am always worried about someone doing something for my own good. Sounds too much like my mother when she didnt want me to have control of my own life.

The Fed's are investigating Beck over his gold scam and it is about time. I hope they expose him for the scam artist he is. Every time life get's hot for him he gets "sick" hence the "I am going blind" scam...........he is nothing but a shyster and ignorant people just eat it up.

Gold is a commodity like any other. Sometimes it goes up and, sometimes it goes down. The price is driven by supply and demand and speculators who have a view of it's directon and make bets. That's what people are doing when they buy gold. Betting it will go up. Since Gold pays no diviend or interest, and you pay a commission to buy it, the price of gold has to go up by more than you would have made had you invested it elswhere plus the commission. All of the hype around gold is driveing the price up, Perhaps to unsustainable levels and this might lead to a bust, unless there is an inflationary spike. Unfortunatly the economic outlook seems to indicate that the ecomony is in for a very long period of recovery. So buying gold is also a bet that the price will not tank before a runaway inflation. a risky bet.

Fear-mongering by those who, like Fox News host Glenn Beck, have lucrative deals with gold vendors has been causing angst about conflicts of interest for months. But reports of customers getting put into investments that lose a third of their value upon purchase are causing a new sense of alarm.

I have to laugh every time somone says "Glenn Beck and Fox News really CARE about people" - ROFL.... yea they sure do....